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Tollway committee recommends liability insurance renewal and extension of owner-controlled insurance program tied to Canadian Pacific agreement
Summary
The Finance and Audit Committee recommended placing on the May board agenda a one-year liability insurance renewal (premium not to exceed $6.3 million) and an extension of the owner-controlled insurance program required under the Tollway's definitive agreement with Canadian Pacific Railroad (contract 21-0155; amount not to exceed $5,464,000).
At a Finance and Audit Committee meeting of the Illinois State Toll Highway Authority, staff recommended the board be asked to approve a one-year renewal of the authority's liability insurance program and to extend an owner-controlled insurance program (OSIP) required by the Tollway's definitive agreement with Canadian Pacific Railroad.
Kevin, a staff presenter, said the recommended liability program would run from June 1, 2025, to June 1, 2026, and use the CMS master contract for insurance broker services. The recommended premium not to exceed $6,300,000, and the recommended flat service fee to Mesirow is $92,500. The program includes a primary layer of coverage (AIG) at $5,000,000 per occurrence with additional excess layers that staff said would combine to roughly $150,000,000 in total coverage; the retention is expected to remain $1,000,000 for all claims.
Kevin said market conditions and reduced global capacity in excess liability markets were significant drivers of renewal terms and pricing. Committee members asked why the policy term is annual; staff replied that market and claims history drive annual renewals.
The committee also discussed the OSIP tied to the Tollway's agreement with Canadian Pacific Railroad. Staff said the OSIP provides project-specific general-liability coverage for construction work that requires access to Canadian Pacific right-of-way. Because unanticipated conditions and coordination delays have extended construction schedules, staff recommended extending the OSIP under contract 21-0155 with an amount not to exceed $5,464,000 and to continue the program through December 31, 2027, subject to future reevaluation.
Directors asked whether the Tollway uses OSIP on other projects and whether the program affects small-business participation. Staff said the OSIP was mandated by the Canadian Pacific definitive agreement for the affected segment and is intended to address specific owner- and railroad-related risk concerns; it is not universally applied to all projects.
The committee voted to place both finance items on the May board meeting agenda with the committee's recommendation.
